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FROM: _ Habana _ REPORT NO: ERR-20_

REPORT MADE. By._Neleon Ly Samnock/psa\ jp __NUNEER PAGES. 2
REPOR|_APPROVED BY: Woodrov C. Olien  __ NUMBER ENCLOSURES:_ None

DATE OF REPORT: 22 August 1959 REFERENCES: None.

DISIRISUTION:
By copy tor Se Headquarters v/mst
1 ~ Embassy (Eccnonic Counselor)
Ontlyt: 1 = Legal Attaché

2 ~ Files - Field File No, 60-120
SOURCE CRYPIONYM:; OS™ ~ ONOD IS NOs
See Commonts below ; “KRYPTON: (Yes | [No
SOURCE, OPERATIONAL DATA, AND COMMENTS: : a . . : Sy ~

SUBJECT: Cuban Econcale Crisis

coma, comms: BS. os OF

[Source Alberto FERNANDSZ Rechavarriay (the chief of the Cuban Sugar Stabilisation
Board who has the: job af selling Cuba's A forzer active mxbder of the 26 of
July Movezent during the revoluticn, he is no# disillusioned, and reportedly is not
going to last much longer in his job, He is wealthy and his fanily have lost

. through CASTRO's econunic reforms. He appears to know s lot about the goverment and a - a

also seems to have an insight into CASTRO... He regards CASTRO as some type of a

DNIVAC machine, his mind automatically photostating detaiis vhich he can and will use |

in the future. He says that GASTRO is ruthless, and that nothing can stop hin in hia
determination to do semething, i.e., agrarian reform, and that be will sacrifice his
friends, his family, his noney, and his fortune to accomplish his purpose.

Again illustrating the present situation in Cuba, the source said that he cannot

- publicly have contacts vith American officials—refusing to let the writer use hia

telephone——and he said that a record is kept of ali his calls ami that his movenents
are periodically checked.

the advigor who warned CASTRO Jn paragraph one of the attached report.was t the

- source,

Asa possible reference to this report and particularly to fiald coment mmber
two, 800 HAVA-2526. ras - 3/¥o8, 543 -

“The second source referred te in Field Comant No. 2 was ANPACK-1 who obtained
his information from president of the Banco Industrial de ¢ Cube]

OF.

HS-2130 |

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26 p> 2 SAVES ZB

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\ee oo -- FIELD INFORMATION REPORT

~ .
,
a , | CVALEATION OF SOURCE A Cor gta reakte  E Unuatty rela C Same coatle Dhol ues erate € wot relate Applied ts
~ sources of deuberu! aone.ty of lopady. regardiess of thelr competence), $ Kevaiiity cane be pl gce tAggbed to catested of le rulthtwotly
” tested sources, _t :
+ PPPMAISS GH CONTEWE 1 Contiemed by other ngepencent ant religds sources 2, Probably re, 3. Posed hve | & Dosttfel § rolaty

fetee 6. Cannct be judged. Daxonentary. Badd on orginal docoment.
‘

.. C-O-N-P-I-D-2-N-T-I~A-L

COUNTRY Cuba REPORT NQ, \ RRH-2130

suBect € Cuban Econonic Crisis DATE OF REPORT 21 Auguat 1959
NO. OF PAGES 2. co cect vee
REFERENCES . None .

DATE OF

raee gay net 1959

DATE ACQ. ba: 2n A t .

SOURCE EVALUATIONS ARE DEFINITVE. APPRAISAL OF CONTENT 1S TENTATIVE. NOTE FOREGOING EXPLANATION.

SOURCE: Cuban Goverment official (F),
/ Appradsal of Contents 3

: 1. Contrary to the reports which are issued by the Cuban Government, the

H : _ financial status of the Cuban economy is rapidly deteriorating and

l ; beconing a serious problem. During July 1959 an adviser to Prime

: Minister Fidel CASTRO Ruz, warned hin to proceed more alowly with the
agrarian reform, because the Cuban treasury was running short of funds.

. . It was pointed out that 57 spgar mills were barkrupt and had not paid

°° the plantation owners for the 1959 sugar crop. CASTRO waa told that

if the recklesa conflacation of agricultural properties ccutinued, the

Cuban Goverment would become obligated to assume even more debts in

order to alleviate the hunger of farz workers.1 ;

2. Another drain va ths economy is government subsidies. For exanple,
the Banco de Desarrollo Economico y Social (BANDES, Social andl
Economic Development Bank) coutrols about U. S, $400 nillion in
properties and investuents such as the Compufila Cubana de Aviacion
(Cuban Airline Company). The companies kave been caught in the
presont contraction of capital and cannot survive without govarmment
subsidies, The subsidies paid by BANDSS amount to U. S. $8 million
4 month, and this is only one exemple of the many payments which are

draining tne Cuban ‘treasury .2 +

Eleld Comments.

. —_——_

1. F : ived 1% appears that there ia
grvuwing unemployment of farm workers, This is the “dead season"—
the period between sugar cene harvests—but it is reported that
most plantation. owmers and ranchers are fearful of confiscation of

: their properties for the agrarian-reform program)/and consequantly

: are doing very little in the vay of maintenance work. The latter

i provided at least a marginal field of employment, ‘and this is now
denied to the agricultural workers. Hewever, spite of this

warring; Yhe dgrarian-reforn program has not been alowed. In
fact, it seems to have been intensified.

C-O-N-F-I-D-E-N-T-J-A-L

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2. the sburee thought that nothing could stop CASTRO In his determination
LC to proceed with the agrarian reform progran as fast as possible. Since

the biggest obatacle to carrying out this Program is the lack of money,
the ‘hource was af the opinion that CAST would do anything to obta‘a
this money ani might even confiscate bank accounts and moneys and nego-
tiable ‘rstruments held in safety deposit doxes, Carrying this one
step furthar, the yource thought such cocfiscatory tactics could only |
be a teaporary saving device and that eventually it would be necessary
for CAST: % obtain a large lean fraz another country. Fe speculated
that this woald sean either the United States or the Soviet Union, and
feared that if it were the atter/it would rean the end of friendly
‘relations with the United States, In respect. to CASTRO's possible
need for a loan, another, fairly reliable, source reported on 18 August
1959 that CASTR) was trying to obtain a W0,000,000-peso loan from docat~

aod
—— ~
fom We SY SEG


